With the emergence of stem cell based tissue engineering concepts, and increasing promise of transplantable progenitor cells in treating a variety of complex disorders, studies involving highly efficient and controlled differentiation of embryonic stem (ES) cells are becoming increasingly relevant. The ultimate clinical applicability of ES cell based therapeutics relies on the fundamental understanding of the basic biology of these cells under various culture environments. Our preliminary results indicate that biomaterials and dynamic culture conditions have significant effects on the growth and differentiation of embryonic stem cells specifically to the hematopoietic lineage. Here we propose a detailed and systematic investigation on how basic physical and chemical properties of the three-dimensional microenvironment and various culture conditions alter ES cell differentiation and influence hematopoiesis. Our approach is to understand ES cell behavior and hematopoietic differentiation in 3D biomaterial scaffolds under both static and dynamic conditions. We hypothesize that 3D scaffolds and bioreactor-based cultures would provide increased cell-cell and cell-matrix interactions, allow better extracellular matrix (ECM) production and provide a more native environment for generation of HPCs, allowing optimal growth and proliferation and efficient differentiation into functional dendritic cells. We further hypothesize that biomaterial properties (physical and chemical), scaffold architecture, culture conditions as well as stromal cell presence i.e. the immediate microenvironment of stem cells, will have profound effects on the differentiation and gene expression profile of differentiating ES cells. Therefore we propose to use pathway-specific functional genomic studies under varying culture conditions to understand the signal transduction mechanisms involved in ES cell differentiation. The results obtained herein will not only help us further understand the basic biology of stem cell differentiation, but also allow us to develop novel techniques for highly efficient production of functional, tissue-specific cells for on-demand cell-transplantation therapies. [unreadable] [unreadable] [unreadable]